What Do You Mean I Can't Have It?

Scarcity, Desire, and the Parable of the Donuts

Posted Jan 19, 2019

Phil and Sebastian Coffee Roasters, a Calgary-based company, has made a name for itself over the past decade on the strength of its award-winning and hipster-friendly brew.

Now P & S have added donuts to the menu. And they have a problem.

Artisanal donuts are this year’s avocado toast. Gourmet donut shops are popping up all over Canada. P & S calls their donut brand “Hoopla,” and the wily baker they work with has created flavours like Blueberry Cardamom and Strawberry Gin Jam and Root Beer Float. The donuts are vended out of their newest shop downtown.

Here’s the problem: Phil and Sebastian figured the donuts would be popular. They had no idea.

“We planned on doing 300 (donuts) a day to start,” Phil Robertson, the co-proprietor, told me a few weeks after the December 4 launch. “But we’re doing almost 2000.”

Remember that episode of The Lucy Show where Lucy and Ethel land jobs on the floor of a chocolate factory, and find they can't keep up? The first month was like that for Phil and Sebastian. Three people worked through the night to make the next day’s donuts. The coffee shop opened at 7am; the donuts were sometimes gone by 9:30, and always gone by noon.

Customers weren’t thrilled. Indeed, many were furious.

“People were full-on angry,” Robertson said. “People who never had a Google account in their life would open one just to give us a one-star review.” Not because the donuts weren’t great, but because they were scarce. If you’re the kind of person who wants a Snickerdoodle donut, you probably want it now. You don’t want to be told you snoozed through your chance.

“We started taking pre-orders for the next day,” Robertson says. “Up to six days in advance. Just to give people hope, right? You knew you could get a donut. But it takes a bit a planning.”

One customer who’d come into the store for a coffee and a donut, only to be skunked on the donut, spotted some of those pre-orders packaged up on a shelf. “She assumed we must be doing catering, and she went online and just savaged us,” says Robertson. “Like: ‘These people have no business doing catering when they can’t keep up with demand in the store.’”

The whole saga put me in mind of a story the comic Louis CK used to tell.* He’s aboard a commercial airline, approaching cruising altitude, when the pilot pipes up on the p.a. system: “Go ahead and open your laptops, folks, we have high-speed Internet!” Hey-ho! The passengers are surprised. They’re thrilled. But then the Internet fails. And instantly the mood in the cabin shifts.

“The guy next to me is like, ‘This is bullsh@t!’” Louis says. “How quickly this guy feels the world owes him something he only knew existed ten seconds ago.”

Free Internet that was gifted and then snatched away. A donut you could almost taste was denied to you. It all leaves a sugary crumb trail right into a couple of interesting branches of social science: the psychology of scarcity, and the psychology of expectation.

*

Duke University psychologist Jack Brehm and Ohio State University social psychologist Tim Brock were among the first to put teeth to a theory as old as Ovid: that we value things more highly when we can’t have them. This “scarcity bias” appears to be a bug – ahem, a feature – of the human brain. Curiously, the effect applies not just to exotic or unusual things, like Cabbage Patch Dolls or Snickerdoodle donuts, but mundane things, too. In one Dutch study, subjects who were told that a book was out of print said they were now willing to pay more for it. In another, earlier study, subjects asked to rank record albums and told they could keep one of them, were then informed that a shipping snafu had made one of the albums unavailable. That album immediately acquired a nuclear glow of grooviness, and subjects ranked it higher than before.

At some level, this may be a (perhaps unconscious) bid for social status, the Yale psychologist Michael Lynn suggested. If very few people have something, then you’ll be uniquely cool if you can somehow get your mitts on it.

But biochemistry is also in play. Getting thwarted in our efforts to acquire something is physiologically arousing. And that arousal translates to desire. Suddenly we’re flat-out jonesing. The dopamine hit quickly fades when we actually acquire the no-longer novel thing. Oh, we say. It is just a donut. It is not love.

Advertisers have, of course, been all over the scarcity effect since at least Sixties. (“Limited time offer!” “Only two seats left at this price!”) What we now call “building buzz” is actually a fairly robust science of manipulating expectations. The receiving end of this can be frustrating. “Expectations are premeditated resentments,” as they say in the 12-Step community. Some degree of letdown is almost guaranteed when the hoped-for thing either fails to materialize, or else fails to live up to its lofty theoretical possibilities.

“People had some fictitious standard in their mind that our donuts would change their life,” says Robertson, “and it fact, they only just tasted ‘very nice.’ We actually had reviews that said: ‘Best donuts in Calgary, but there are better donuts in North America. Two stars.’”

The galling thing about that donut is this: You almost had it. If you’d just shown up half an hour earlier it would be passing through your digestive system right now. You had a “near-miss.” And the “near-miss” effect is, indeed, so tantalizing that the gambling industry has cravenly exploited it at the gaming tables. Some slot machines are programmed to dial up more apparent near-misses than would be expected by chance alone. Near-misses quicken the heart and keep you, hopefully, pulling that lever.

Like electricity in a blackout, or oxygen in a submarine, something you took for granted a minute ago can suddenly seem as precious as life itself. In an age of quickening trend cycles and deepening FOMO, that can become crazy-making. But here’s the good news: There’s an antidote to that accursed sense of feeling ripped off when you lose a thing you never knew you really wanted. You just reverse your thinking. Instead of ruing the missed opportunity, why not celebrate it?

My wife figured this out years ago during a particularly lean financial stretch in our household. “Hey,” she said, looking out at our tiny yard. “Think of the money we’re saving on gardeners.”

She began to riff:

“Think of what we’re saving on golf balls, and crystalware polish, and dry cleaning bills for high-thread-count sheets.”

“On hair products,” I said, rubbing my balding pate.

“On Russian lessons.”

“On the guy you hire to scrape barnacles off your boat.”

Randy Cohen, the former New York Times ethics columnist, once had a similar moment of clarity. It occurred to him he’d just saved $90,000 by not buying a Mercedes today.

He gave himself the rest of the day off.

* I know. But this Louis C.K. bit came before his lapse of judgment, so I hope you’ll forgive me for grandfathering it in.